January 01, 2015
News in Brief, January 2015
Born or Made?
Amway Global EntrepreneurshipReport Explores the Education Factor
Full report available at:
As the year comes to a close, industry leader Amway has once again published research on the state of entrepreneurship around the globe. If entrepreneurs are the engine of business, the company’s Global Entrepreneurship Report provides a regular check under the hood. This year’s study includes a record 38 markets, where on average 75 percent of respondents expressed positive attitudes toward entrepreneurship. The report reveals that entrepreneur fever is highest among younger people, specifically those under 35, where positive responses increased to 80 percent.
Now in its fifth year, the survey explored attitudes toward entrepreneurship education. In 37 of the 38 countries polled, a majority believed that entrepreneurship is a skill that can be taught; however, one region of the world remains polarized on the question. Eighty-three percent of Chinese respondents—more than in any other market—affirmed the ability to learn entrepreneurial skills, while Japan represented the other end of the spectrum at just 40 percent.
Although education is a crucial factor, location is also key to striking out as an entrepreneur. The survey asked respondents to gauge their society’s attitude toward entrepreneurship based on factors such as politics, media coverage and personal experience. The responses show that Denmark is most friendly toward entrepreneurs, while direct selling’s largest market, the United States, appears 13th on the list. On average, almost half of respondents said their country is “very friendly” or “rather friendly” toward entrepreneurship.
The insights in this year’s report come from a survey of 43,000 people, ages 14-99. Amway once again partnered with Technische Universität München and research firm Gesellschaft fuer Konsumforschung to create the report. The company also partnered with an academic advisor in each market to assist in interpreting the data.
Moving up: CVSL Now Trades on NYSE
The common stock of CVSL Inc. began trading on the New York Stock Exchange on Dec. 5 under the ticker symbol CVSL. Previously traded over the counter on the OTCQX, the Plano, Texas-based company first filed its S-1 in May and received authorization in late August.
CVSL recently withdrew plans for a $60 million equity raise, according to IPO investment manager Renaissance Capital. CVSL’s initial strategy had been to raise $60 million with an offering of 6.7 million shares priced at $8 to $10.
CVSL has built a portfolio of eight independent direct selling companies and has reported $89 million in sales for the 12 months ended Sept. 30, 2014.
For the third quarter ended Sept. 30, 2014, CVSL reported revenue of $24.0 million, compared to revenue of $24.3 million during the prior year period. Operating loss was $5.6 million for the third quarter, as compared to $1.3 million the previous year. The increase in operating losses was the result of the six acquisitions completed in 2013.
Youngevity Opens Russia Office
Youngevity International Inc. (YGYI—OTC.QX) announced the grand opening of its new distribution and sales support center in Moscow, its first office in Russia, one of the fastest-growing billion-dollar markets in the direct selling industry.
The company also posted a 77.3 percent increase in net revenue in the third quarter of 2014 to $37.6 million, compared to $21.2 million in the same period last year.
Gross profit was $21.0 million, compared to $12.9 million in the same period last year. Operating income was $1.2 million, an increase of 32.4 percent over the prior period. Net income decreased to $185,000 compared to $516,000. Adjusted EBITDA was $2.1 million, compared to $1.7 million.
Be Connected Conference Calls for Executives to Change their Game
|Mary Kay Inc. Chief Marketing Officer Sheryl Adkins-Green served as the Master of Ceremonies for the 2014 Be Connected Conference, which was held on Mary Kay’s home turf of Dallas, Texas. Photo Credit: Karen Garrett, DSA
The Direct Selling Association’s 2014 Be Connected Conference, held Dec. 3-5 in Dallas, focused on disruptive thinking in the realm of marketing and communications, with a lineup of speakers addressing the audience from one main stage.
The conference once again included a special session for young and growing companies to interact with more seasoned executives. This Smart Start Seminar included roundtable discussions on topics such as marketing via grassroots efforts and social media, developing the salesforce and building the corporate team. Thursday’s and Friday’s sessions included rapid-fire segments sprinkled among panel discussions and presentations from some of the industry’s leaders.
A report from DSA President Joseph Mariano outlined the Association’s agenda for the coming year, which focuses on the “three Ps” of policing, promoting and protecting the industry. Through its programs, the DSA is working to demystify the sales channel for policymakers and the general public and tell the story of how direct selling positively affects the lives of millions of Americans. One of the most powerful ways to tell that story is through the Association’s Code of Ethics, which Mariano encouraged companies to share and promote among their salespeople.
Keynote speaker Luke Williams, a Professor of Innovation at the NYU Stern School of Business and Executive Director of the Berkley Entrepreneurship Center, took the stage on Thursday with a look at “game-changing, disruptive innovation.” A globally recognized authority on innovative leadership, Williams challenged leaders to avoid incremental innovation and focus on bold new experiments.
“To disrupt the marketplace, you have to change the way you’re thinking about your business and the way you interact with your customers every day,” Williams said.
Saddle up for San Antonio
Planning is well underway for the Direct Selling Association’s 2015 Annual Meeting, which will be held May 31-June 2 in San Antonio, Texas. The theme: Opportunity.
Mary Kay Inc. President and CEO David Holl is chairing the DSA’s Annual Meeting Committee. Early bird registration rates are in effect through March 31, and a number of sponsorship opportunities are available to active member and supplier member companies. Contact Britta Shillingsburg at firstname.lastname@example.org for details.
The Direct Selling Education Foundation plans to hold a fundraising auction during the annual meeting. The 2014 live auction raised more than $150,000 for the foundation. This year, the organization plans to add a silent auction component to the live auction with the goal of raising $200,000 combined. To learn more about how to contribute to the auction effort, contact Tamara Ingram at email@example.com.
DSEF Steps up Academic Efforts
The Direct Selling Education Foundation plans to expand the size and scope of its academic advisory council. Executive Director Gary Huggins, who joined the foundation in July, said he wants to recruit 20 new members to the council in 2015. The goal is to attract an active group of professors who will produce case studies, white papers and other academic products, as well as participate in public programs and events related to the industry.
“The Foundation’s Academic Advisory Council is an important platform for supporting and equipping key academics and thought leaders who will advance knowledge and understanding about the importance of the direct selling channel among their peer networks as well as the next generation of students,” Huggins said.
Primerica Plans Share Buyback
Primerica’s board of directors (PRI—NYSE) has authorized a share repurchase program for 2015, pursuant to which the company expects to repurchase up to $150 million of its common stock.
“In each full year since our 2010 IPO, we have returned over 100% of operating earnings to stockholders while executing initiatives to drive long-term distribution growth,” said Rick Williams, Chairman of the Board and Co-CEO.
1Q Earnings up at LifeVantage
For the first quarter ended Sept. 30, 2014, LifeVantage Corp. (LFVN—NASDAQ) reported that revenue was $52 million compared to $51 million in the prior year period. Revenue growth, excluding Japan, increased by 7 percent compared to the prior year period. Operating income improved 53 percent to $7.8 million. Net income grew 45 percent to $4.7 million or 5 cents per diluted share compared to $3.3 million or 3 cents per diluted share in the prior year period. During the quarter, the company also repurchased $2 million or 1.4 million shares.
ForeverGreen Sees 231% Growth
ForeverGreen Worldwide Corp. (FVRG—OTC.BB) announced earnings for the third quarter ended Sept. 30, 2014. The company achieved its sixth consecutive quarter of operating profitability and fifth consecutive quarter of net profitability. Sales increased each quarter for the last six quarters with sales for the third quarter increasing to $15.9 million from $4.8 million, a 231 percent increase. Gross profit rose to $12.5 million compared to $3.7 million during Q3 2013, a 241 percent increase. Gross profit margins increased to 78.7 percent versus 76.5 percent during the comparable quarter of 2013.
Direct Selling Companies Partner to Make the Season Bright for Kids
|In addition to a $500,000 Toy Drive donation, Princess House gave $1.5 million in Cookin’ Kids and other healthy cooking products through its “Share the Joy” Holiday Donation Campaign.
Direct selling companies are a generous bunch, and that spirit of giving back shines brightly during the holiday season. As in many years past, the Direct Selling Association and its member companies focused their 2014 holiday charitable efforts on the TODAY show’s Holiday Toy and Gift Drive. Contributors included Amway, Arbonne, Mary Kay, Pampered Chef, PartyLite, Princess House, SeneGence, Shaklee, Southwestern Advantage, Stampin’ Up!, Team National, Thirty-One Gifts, Tupperware and Vantel Pearls.
This year, Thirty-One Gifts donated its one millionth product to the TODAY Toy Drive. The handbags, totes and accessories seller contributed more than 250,000 products valued at more than $9 million. Thirty-One Founder, President and CEO Cindy Monroe announced the donation alongside one of the company’s senior executive directors during the Dec. 2 segment of TODAY.
Taking part for the ninth year, PartyLite donated more than $2 million in home décor, candles and home fragrance gifts for children to use as holiday gifts for a special adult in their life. Joan Connor, President of PartyLite North America, also appeared on the show’s Dec. 2 segment to present the gift.
“The local organizations distributing our products tell us they especially love the concept of teaching children to give as well as to receive,” Connor said.
Longtime contributor Tupperware Brands Corp. donated lunchbox sets and other kid-friendly items to the Toy Drive. On TODAY’s Dec. 8 segment, Chairman and CEO Rick Goings appeared with special guest Maryah Sullivan, named National Youth of the Year by the Boys & Girls Clubs of America (BGCA). Tupperware is a charitable partner of BGCA, and Goings sits on the organization’s board of governors.
In addition to a $500,000 Toy Drive donation, Princess House conducted its own “Share the Joy” Holiday Donation Campaign to encourage healthy cooking and inspire giving in local communities. The kitchenware company donated $1.5 million in cookware and Cookin’ Kids products to local non-profits—including a handful or organizations selected by top leaders in the company’s salesforce.
EDC Records 18 Consecutive Months of Growth
Educational Development Corp. (EDC) (EDUC—NASDAQ) reported the largest quarterly net revenue in the company’s history with net revenue of $10.9 million for the quarter ended November 2014, compared to the previous high of $10.2 million recorded for the quarter.
EDC was led by the home business division, Usborne Books & More (UBAM), which recorded a 49 percent increase in the fiscal quarter ended November 2014. UBAM has now recorded 18 consecutive months of growth, with the past five months, July through November 2014, each posting monthly gains in excess of 40 percent over the same months in 2013. DSN asked Randall White, CEO of EDC and Founder of UBAM, what factors contributed to this growth. Here’s what he had to say:
“In order to understand increased momentum, it is imperative to first understand where we were. Just under three years ago, February 2012, our direct sales division was in decline that had reached six years in length. I received a call from an unhappy consultant in Texas who had just presented our titles to a school and the next day discovered they had purchased the items on Amazon. I had been struggling with this dilemma for quite some time, and that day it became crystal clear. If you undercut your sales people you will lose them.
It was that day that I began the process to eliminate our products from being sold on Amazon, sales which represented 20% of our retail division. Although it took some time for the direct sales division to recover and turnaround, once it occurred, the results were evident. The sales decline stopped and sales and recruiting have been terrific in the last 18 months.
Although “the Amazon decision” is the main reason for the positive effect, there have been numerous other changes within our organization resulting in our fabulous momentum: the addition of Heather Cobb, our Vice-President, who has brought insight and perspective that we had been missing, updated branding making us more recognizable to customers, and new and relevant graphics which have made us much more approachable. The mainstay, however, is a top-notch product and wonderful Home Office staff and Consultants.”
Mannatech Reports Over 25 Percent Increase
As international operations continue to grow and the number of active associates and members increase, Mannatech Inc. (MTEX—NASDAQ) is finding improvements in regional sales. For the third quarter ended Sept. 30, 2014, operations outside of North America accounted for approximately 63.4 percent of consolidated net sales, whereas in the same period in 2013, operations outside of North America accounted for approximately 57.8 percent of consolidated net sales.
Asia/Pacific showed the highest improvement with third quarter net sales that increased by $8.3 million, or 37.7 percent, to $30.3 million, as compared to $22.0 million for the same period in 2013. EMEA net sales were not far behind, increasing by $1.2 million, or 32.4 percent, to $4.9 million, as compared to $3.7 million for the same period in 2013. North American net sales increased by $1.7 million, or 9.1 percent, to $20.4 million, as compared to $18.7 million for the same period in 2013.
“The growth in net sales reflects the continued expansion of our business, the recent launch of our Uth skin care product in markets outside of North America, and the anniversary of our loyalty program,” said Dr. Rob Sinnott, CEO and Chief Science Officer.
For the third quarter net sales for the company’s overall business were $55.6 million, an increase of 25.2 percent as compared to $44.4 million in the third quarter of 2013. Net sales increased 22.5 percent in constant dollars. Net income was $5.1 million, or $1.89 per diluted share, for the third quarter 2014, as compared to net loss of $800,000, or 30 cents per diluted share, for the third quarter 2013.
RBC Life Sciences Reports 3Q Results
For the quarter ended Sept. 30, 2014, RBC Life Sciences Inc. (RBCL—OTC.BB) reported net sales of $7.5 million compared with net sales for the same period in 2013 of $6.6 million, an increase of $875,000, or 13 percent. Cost of sales for the quarter ended Sept. 30, 2014 was $3.2 million compared with $3.6 million for the quarter ended Sept. 30, 2013, a decrease of $372,000, or 10 percent. The net loss for the quarter ended Sept. 30, 2014 was $124,000, or 6 cents per share, compared with a net loss in the third quarter of 2013 of $143,000, or 6 cents per share.
Reliv Returns to Profit in Third Quarter
For the quarter ended Sept. 30, 2014, Reliv International Inc. (RELV—NASDAQ) announced a return to profit after “critical transitions” were undertaken to encourage company growth. Q3 net sales were $14.3 million, a 13.5 percent decrease from the third quarter last year. U.S. net sales totaled $10.9 million, a decrease of $2.2 million, or 16.8 percent, compared to third quarter 2013 net sales. Net income for the third quarter of 2014 was $166,000 or 1 cent per diluted share, compared to $293,000 or 2 cents per diluted share in the 2013 third quarter. Income from operations for the third quarter of 2014 was $228,000 compared to $402,000 in the same quarter of 2013.
J.Hilburn Opens Showroom Doors
Custom menswear brand J.Hilburn is opening the doors of its Dallas showroom to the public. The newly renovated space, previously available by appointment only, showcases J.Hilburn’s full collection of luxury clothing and accessories.
Stylists can use the space, located near Dallas Love Field airport, to introduce the brand to new clients and guide them through their selections, which include custom Italian fabric, collar, button, thread color and monogram options.
Crius Energy Has Best Quarterly Performance to Date
Crius Energy Trust (KWH-UN.TO—TORONTO), for the quarter ended Sept. 30, 2014, showed its best quarterly performance since the company’s IPO in November 2012. Driven by improved operation effectiveness and strong commodity margins, Crius had a gross margin of $37.9 million or 24.5 percent of revenue, compared to $30.0 million or 20.6 percent of revenue, despite energy consumption being lower than historical averages.
Adjusted EBITDA was $15.2 million, a 44.8 percent increase over $10.5 million. Revenue from the company’s residential solar offering continued its rapid growth, increasing by 18 percent to $2.0 million in the third quarter of 2014, from $100,000 in the third quarter of 2013.
Blyth Reports Increase in Third Quarter Net Earnings
Blyth Inc. (BTH—NYSE) reported that net sales for the three months ended Sept. 30, 2014, decreased approximately 6 percent to $90.8 million from $97.0 million for the comparable prior year period. Blyth’s operating loss for the third quarter was $11.4 million this year versus a loss of $11.5 million last year.
Net earnings attributable to Blyth Inc. were $106.2 million for the quarter compared to a loss of $8.5 million in the prior year period. Diluted net earnings per share attributable to Blyth Inc. were $6.57 per share compared to a loss of 53 cents per share in the prior year period.
6,600 People, 200 Companies, 4 Days, 1 Event
|Eric Worre walks the room, answering questions from Go Pro Recruiting Mastery attendees as they use their mobile phones to set up appointments with prospects via text and other messaging platforms.
Approximately 6,600 network marketing professionals representing more than 200 companies and 70 countries gathered in Las Vegas in late November for a four-day conference focused on recruiting and other business development skills.
The Go Pro Recruiting Mastery event, Network Marketing Pro Founder Eric Worre’s fifth, took over the Mirage Hotel with more than 30 speakers taking a single stage. It was likely the largest gathering of direct selling field representatives from multiple companies in U.S. history. In addition, approximately 500 six-figure earners participated in a two-day workshop before the event.
A key to Go Pro’s success is Worre’s steadfast commitment to prohibiting solicitation of participants.
“We decided from our very first one to take an extremely hard line—one strike and you’re out,” he said. “For this event, you’re going to take your pins off, leave your product in the room and have connection with people as peers and not as prospects.”
The event offers attendees a blend of practical advice, inspiration and hands-on training. During one of the most interactive sessions, the entire audience conducted an appointment blitz, using text messages to line up appointments for after the conference while Worre walked through the room answering questions and providing on-the-spot assistance in landing a meeting. By the end of the 1-hour session, virtually everyone reported lining up at least one appointment, with some participants saying they had as many as 14.
“This isn’t to replace any company event,” Worre said. “This is just a way to learn from other voices that you otherwise don’t get to hear.”
Worre also used the event to debut his documentary film, Rise of the Entrepreneur. The 50-minute movie features interviews with 25 notable supporters of the business opportunity the channel affords. At press time, nearly 200,000 DVDs had been sold and a digital delivery system was close to coming online.
Natural Health Trends Posts 250% Increase in Earnings Per Share for Third Quarter
Natural Health Trends Corp. (NHTC—OTC.BB) announced financial results for the quarter ended Sept. 30, 2014. Total revenue was $31.8 million, up 125 percent compared to $14.2 million in the third quarter last year. Operating income was $5.5 million, up 312 percent compared to $1.3 million in the third quarter last year. Net income was $5.4 million, or 42 cents per diluted share, which is an increase of 250 percent compared to $1.3 million, or 12 cents per diluted share, in the third quarter last year.
On Nov. 4, 2014, the board of directors also authorized management to pursue the listing of its shares of common stock on The Nasdaq Capital Market.